Mid-East peace talks nearly collapsed this week. But at the urging of the U.S., the parties are struggling on. A key issue is where to draw a border between Israel and a future Palestinian state. That's complicated by the 350,000 Israeli settlers living on land that Palestinians want for that state. Some of the settlers would take compensation to move. But many want to stay - a few even under Palestinian rule.

NPR's Emily Harris reports.

EMILY HARRIS, BYLINE: Israeli Nachum Pechenick recently finished building a new home in the occupied West Bank.

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HARRIS: It's in what's known as an outpost settlement - illegal even in the eyes of the Israeli government. If there were a peace deal that created a Palestinian state, Pechenick's home and the others around it might go. But he wants to stay. He wants to become a Palestinian citizen.

NACHUM PECHENICK: First, is to be a simple citizen. To pay the tax to the Palestinian side. Maybe to work in the Palestinian side. Maybe to work on the Israeli side.

HARRIS: He has bigger dreams.

PECHENICK: I want to be in the Palestinian Parliament. Yeah.

HARRIS: Pechenick says it would be good for a Palestinian state to have a sizable Jewish minority, just as Israel now has an Arab minority.

PECHENICK: The idea of minorities on the two sides, this is the idea of a sustainable peace. It will be democracy. It will be with good relationship and cooperation between the two states. It's so simple. It's amazing. It's so simple, but it's so difficult in our consciousness.

HARRIS: And if there were a real peace, he says, he wouldn't need to live guarded by Israeli soldiers, as he does now.

Another settler calls this notion naive.

ELYAKIM HAETZNI: It's a very noble idea. And it would work somewhere else.

HARRIS: Eighty-seven year old Elyakim Haetzni left Hitler's Germany as a child. As a soldier, he was injured in the 1948 War after Israel declared independence. He moved to a settlement next to Hebron to help rebuild a Jewish presence there after Israel captured the city in 1967.

HAETZNI: It is by a miracle that I did not remain in Germany and went up the chimney of Auschwitz. And then I was very severely wounded. So I have all my life a feeling that I owe something. This is my payment.

HARRIS: He is determined to stay where he is but as an Israeli citizen under Israeli protection. He wants any peace deal to guarantee that.

HAETZNI: If the stipulation is that the Arab party undertakes to protect the life of the Jews, then we can already write our wills.

(LAUGHTER)

HARRIS: Tovah Lazaroff, who covers settlements for the Jerusalem Post, says the number of Jews considering staying on as citizens of a Palestinian State is small but could grow. She says a key question is whether a Palestinian state would allow Jewish communities.

TOVAH LAZAROFF: We're talking about a two-state solution that ends the conflict and allows for two people with national aspirations to live together. In that scenario, why couldn't a group of Jews live in an intentional community in the state of Palestine?

HARRIS: So far, Palestinian leaders say any individual - of any background - would be welcome to apply for citizenship. But absorbing Jewish settlements, seen by Palestinians to be on stolen land, that's a different question, says Hanan Ashrawi, a Palestinian politician.

HANAN ASHRAWI: We have nothing against Jews being Palestinian citizens. But we cannot incorporate an illegality and allow settlements to continue.

HARRIS: History breeds suspicion here. Some current settlements began with just a small Israeli foothold in Arab areas.

As a second generation settler, Nachum Pechenick might seem an unlikely pioneer for peace. But he says that's what he is.

PECHENICK: I'm not want to stay here to control the land. I want to stay here because I love my motherland. And I want to be here with a good neighbor.

HARRIS: Any peace deal is still far off, but someday Palestinians might have to decide whether to accept a settler as a citizen.